An Egyptian lawyer withdrew on Friday his lawsuit against Hamas, despite achieving a ruling in the case declaring the Palestinian faction a "terrorist group" under Egyptian law.

Samir Sabry had hailed the February verdict against Hamas as "historic" and criticised the government's appeal against it, but on Friday said he would drop the suit so that the verdict would not be "an obstacle to Egypt’s reconciliation efforts” between Palestinian factions and Israel.

Sabry’s case withdrawal doesn’t automatically cancel the verdict, which was based on two separate suits filed by Sabry and another lawyer, Ashraf Said.

The Cairo Appeal Court for Urgent Matters will decide on the matter on Saturday.

Following Sabry’s withdrawal, Hamas spokesman Sami Abu Zuhri welcomed the move on his official Facebook account.

“This is an important development…that preserves the Egyptian’s national role towards the Palestinian cause,” Abu Zuhri said.

In January, another court verdict also declared Hamas’s military wing, Al-Qassam Brigades, a terrorist organisation.

The court reasoning in both verdicts stated that Hamas and Al-Qassam Brigades "support and finance terrorist attacks in Egypt.”

The relationship between Egypt and Hamas, the Muslim Brotherhood’s sister organisation in Gaza, soured after the ouster of Islamist president Mohamed Morsi in 2013.

The Muslim Brotherhood was designated a terrorist organisation by the Egyptian government in November 2013. 

Egypt has accused Hamas of meddling in its internal affairs and supporting Islamist insurgents in Sinai, which Hamas strong denies.